Alibaba, BYD Lead Hong Kong Stock Retreat

Hong Kong stocks fell after mainland Chinese investors pulled their money from the market for the first time in more than week while the local currency stayed under pressure. Big tech leaders and electric-vehicle (EV) makers paced losses amid concerns about intensifying competition.

The Hang Seng Index lost 0.3 per cent to 20,329.64 at 10.25am local time, bringing the setback this week to 0.3 per cent. The Tech Index fell 1.2 per cent while the Shanghai Composite Index declined 0.2 per cent.

Alibaba Group retreated 2.3per cent to HK$89.60, while Tencent slipped 1.2 per cent to HK$352.80. Baidu lost 1.3 per cent to HK$124.60 and JD.com declined 1.1 per cent to HK$141.30. BYD led EV makers lower, losing 1.2 per cent to HK$224.80 while Xpeng slid 1.2 per cent to HK$36.95 and Geely Auto weakened 0.9 per cent to HK$9.78.

Mainland Chinese investors sold a net of HK$5.15 billion (US$655.8 million) of Hong Kong-listed shares through the Stock Connect’s southbound link on Thursday, the first net-selling since April 12, according stock exchange data compiled by Bloomberg. The sale trimmed their net buying this week to HK$7.5 billion so far this week.

Losses in EV makers deepened after Tesla’s CEO Elon Musk said the company would prioritise sales growth over profit, signalling a price war may prolong to defend its market share. At the Shanghai Auto Show, notable absentees among underachieving start-ups signalled competition could drive more players out of the market.

Equities also suffered as the local dollar stayed glued at the weak end of its trading band amid capital flight. The Hong Kong Monetary Authority intervened several times this week in the global currency market to defend the peg, sending its liquidity below HK$50 billion, the lowest since 2008.

One company began trading today. Chemical company Peric Special Gases surged 40 per cent to 50 yuan in Shanghai.

Major Asian markets declined. The Nikkei 225 in Japan lost 0.1 per cent while the Kospi Index in South Korea fell 0.8 per cent and the S&P/ASX 200 in Australia declined 0.3 per cent.